Opportunities for Asset Building with Matched Savings Accounts

1. Opportunities for Asset Building with Matched Savings Accounts Peter Stahl, Director of Economic Development Community Enterprises Corporation (CEC) A subsidiary of Collaborative Support Programs of New Jersey (CSPNJ)

2. Economic DevelopmentMission Our economic development mission is to promote: • self-determination, • self-sufficiency, • community integration and • personal responsibility By offering products and services that increase a person’s financial stability and security through financial education, personal assets and employment.

3. Economic Development Vision Poverty is one of the key barriers to recovery and we seek to promote systems transformation that promotes asset building and economic prosperity. Given access to economic opportunities, people in recovery with psychiatric disabilities living in poverty will achieve financial stability, security and independence through increasing financial knowledge and net worth.

4. Overview:the People We Serve • People living with psychiatric disabilities and/or special needs • Have been financially devastated • Have little or no earned income • Regulated to living on federal and state assistance • Have little or no access to banking, financial services • Moving into employment but without the knowledge and experience in managing their finances

5. Overview: Synopsis • An overwhelming number of people living with psychiatric disabilities and/or special needs live in poverty • Poverty is a barrier to the individuals wellness and recovery journey and to community integration • A way to overcome poverty is with asset building strategies that include education, employment, credit, savings, investment It is assets, not income, that allow people to move out of poverty and achieve economic independence. Source: CFED (Corporation for Enterprise Development) People living in poverty have the ability to save with the right incentives

6. Savings Incentive Initiative Program • Rainy Day Savings: On Demand with .1:1 match for emergencies, car repair, medical bills • Small Purchase Savings: 6 months and a .5:1 match up to $600 for a computer, furniture etc. • Consumer Savings Club: 1 year with a 1:1 match up to $1,000 for a car, security deposit etc. • Tax Liability Savings: Tax Year till April 15 with a 1;1 or .25:1 match; designed for the 1099 worker • Individual Development Account (IDA): 3-5 years with a 2.5:1 match for a home up to $2,000; and a 4:1match for business or education up to $1,000

7. Savings Incentive Initiative Statistics (other than IDA) • Total participants 97 • Total savings $40,189 • Average savings per participant $414 • Total match $24,770 • Average match per participant $255 • 14 purchased cars • 5 purchased computers • 4 purchased wardrobes • 4 purchased quality furniture • 3 each: car insurance, credit card and medical bill • 2 each: television, security deposit • 1 each: weight control program and funeral arrangement

8. Savings Incentive Initiative Statistics (IDA) • Total number of participants 25 • Participants finishing the program 19 • Total savings $55,316 • AFI match $73,059 • CSPNJ match $25,579 • Other match $17,718 • Total invested in assets $161,968 • Asset purchase price $544,885 • Asset market value $804,435 • 3 Homes • 9 Degrees and certification • 7 Business

9. Key Elements of Matched Savings Program • Engaging individuals through: • Financial Literacy Education and Training • Matched Savings Incentives • Savings Goals • Coaching for Personal Financial Growth and • Asset Accumulation • Engaging other organizations through: • Partnerships and coalitions • Advertisements and Marketing Material

10. Engagement Challenges • Overcoming misinformation • I will lose my benefits • Asset limits don’t allow me • I can’t afford to save • Overcoming fear • The economy is bad • I can’t afford or maintain my own home • Overcoming barriers • I owe money and can’t afford to pay • My credit is bad

11. Lessons LearnedWe Must: • Teach responsibility and stewardship for money • Address all aspects of the persons finances to increase net worth, especially credit and credit card debt. • Encourage a savings component to every budget • Start with small saver accounts for things they want to save toward • Build savings skills toward an investment in an Individual Development Account Program • Limit goals to assets and improvement of quality of life, not debt repayment • Use micro loans instead of benevolence, transition payments to a savings account • Address good citizenship and asset opportunities by filing taxes • Incorporate financial literacy education and training into wellness and recovery curriculum

12. Access and Opportunity • Resources for matched savings programs: • Collaborative Support Programs of NJ www.cspnj.org • CFED www.cfed.org • Assets for Independence Resource Center (AFI) http://www.idaresources.org • Resources for financial education: • Federal Deposit Insurance Corporation (FDIC) www.fdic.gov/consumers/consumer/moneysmart • National Disability Institute Real Economic Impact Tour http://reitour.financialsoccer.com/ • Federal Reserve Bank http://www.dallasfed.org/ca/wealth/index.cfm

13. Future Focus of CSPNJ and CEC Organizational Innovations • Extending the initiative statewide to include a coalition of mental health organizations: • Creation of the “Access Financial Literacy Education Association” • Proposed Low Income Community Development Credit Union • Resources • National Federation of Community Development Credit Unions www.cdcu.coop • National Credit Union Administration http://www.ncua.gov